The Bond market is still pricing in a recession ahead and when bonds and equities disagree, the bond market usually wins. The Fed dissenters and the Republican Congressmen kept the Bernanke Fed from expanding its balance sheet. ‘Operation twist’ may not be too much of a help. If conditions worsen; expect the Fed to carry out another round of QE. In the near term, Europe leveraging up the EFSF and a good start to Q3 earnings season has the potential to deliver a short term rally in equities, but it’s not one to participate in without insurance. Dollar strength has wiped some glitter from Gold, but the case for Gold remains solid.